Analysis: The Fed's final rate cut is expected to exceed its currently implied level

BlockBeats News, September 18th - Economists at the Netherlands International Group stated in a report that the downside risks facing the US labor market were the main reason for the Fed's rate cut; given the recent weak job data, this reason was not surprising. Fed Chair Powell described this rate cut as a "risk management-based rate cut," because on the surface, the US economic conditions seemed acceptable.

However, economists pointed out that a deeper analysis would reveal that the situation was changing, with the most significant change being reflected in the labor market. The institution's economists also noted that the Fed raised its economic growth and inflation expectations while lowering its unemployment rate expectations, indicating that policymakers believed that taking swift and robust action in the coming months would have a tangible impact on the economy. We believe that the Fed's final rate cut will exceed its current implied level. (FX678)